Buying vs. Renting
Whew! That was a lot of information yesterday regarding the pros and cons of buying a home. So today we now look at the pros and cons of renting. I would LOVE to hear your feedback on what you think of buying vs. renting. Which do you prefer? What would you recommend to a friend? Why? I see both sides and reasoning for each as a realtor. But I specifically would love to hear from you to know what you are thinking about buying and renting. It is important for me to understand what you feel is important and why you think buying is the better option or if you think renting is the better option. Enough of the chit chat right? Let’s get on with the show! Renting here we come!
Flexibility: I am going to start off with this one because I think it is the most important one for renting. The great thing about renting is that even though you might be bound to a contract for 6 months to a year, there is a way you could leave at the end of your term. You are not bound to be there for years to at least get to a point where the sale price would be enough to breakeven. You have nothing to loose if you leave. You can stay there for a year, two years, and then decide you want to move to another location, another city, or stay at your rental if you are happy with it.
Career Uncertainty: This one goes with flexibility if you have a job that requires you to move around frequently renting is better. The best thing is if you spend 2-3 years in one spot you can just get up and leave when you need to. When you own your home it isn’t that easy to just pick up and leave when your work says you have to move across the USA. Sure, you could rent out your house if you owned it but then you would be paying a mortgage plus rent on another place in your new city. It can be very exhausting especially if you are on the opposite side of the country.
Income Uncertainty: Oh this can be a big one. Is your job stable? Does it seem as if things are going great one minute but the next not so much? Is it a roller coaster? This might be an opportunity when you should definitely see it as a pro to renting. Sure, the rent can go up but you can negotiate with the landlord to see if something can be arranged or an agreement to be made. Not only is renting a better option it might be the only option, especially if obtaining financing could be hard due to the fluctuations in pay.
Bad Credit: This is where renting becomes a huge pro. If you can’t get approved for a loan then your only option is to rent (or live with family but I don’t think the later is a good idea especially if it is an extended time period they might drive you crazy!). But renting is a huge pro if you make your payments on time and consistently, that will build up your credit so that you can buy.
Maintenance: This is one of the best pros I hear from renting, you don’t have to worry about fixing the roof if it is leaking, or the gas heater, if it starts to leak, and the list goes on and on. When something is broke you just call the landlord. Makes life easier that’s for sure!
Utilities: SOMETIMES and I put this very loosely and do not assume that this is for all rentals. But SOMETIMES landlords will include some or all of the utilities. In one rental that I was in they included everything, water, gas, sewer, electricity, ect. In the next rental though they only included garbage and as a renter we were responsible for everything else.
Equity: While renting you are putting equity into your landlord’s account or towards their mortgage.
Tax Deductions: There are no tax deductions for your rent like there are when you purchase a home.
Creative Control: You have very little control in some cases for painting the walls, putting up pictures. A lot of times paint swatches and approval are required before being able to paint. Some landlords may not even let you put holes in the walls to hang up pictures.
Maintenance choices: Don’t like your refrigerator? Dishwasher? Or stove? You don’t really have an option to choose what it looks like or how it functions. That is the landlord’s decision as they use their money to put in the appliances.
Pricing: There are times when renting is not the cheaper option. Our current mortgage payment is dramatically less than what we would be paying for an apartment. Here’s a scenario in one location where we lived the rent on a 3 bedroom apartment would be $1677, now that also included utilities to an extent if we went over the allotted amount we would be responsible to pay. Compare that to a 4 bedroom home and the range can be from $875-1,100 depending on the neighborhood, purchase price, etc. in the areas we would consider living in. That is a pretty big price difference even when you throw in utilities.
Backyard: Would you love to have a tranquil garden? Swing set for the children? Fenced in backyard? Built in Grill? Well it would be hard if not impossible to change everything in the backyard or even add one or two things.
Uncertainty: One last con to renting is if for some reason your landlord faults on their loan and gets foreclosed on the rental house, you would have to leave. The landlord can also evict you if you break a part of the contract or refuse to pay.
As of now you have read both the Renting Pros and Cons and the Buying Pros and Cons. Which one best suits your needs? It is beneficial for the family of the elderly if they rent, so that when they pass on they won’t have the question of “What to do with this house?” When you are ready to either purchase a home or find a rental home give us a call!